BILL REQ. #:  H-3046.1 

Prefiled 01/06/14. Read first time 01/13/14.   Referred to Committee on Government Accountability & Oversight.

     AN ACT Relating to creating a liquor license for fairs; amending RCW 66.24.170, 66.24.244, and 66.24.145; reenacting and amending RCW 66.20.300, 66.20.310, and 66.24.240; adding a new section to chapter 66.24 RCW; and creating a new section.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION.  Sec. 1   (1) The legislature recognizes that state and local fairs provide valuable educational and entertainment experiences for the citizens and visitors of the state. Each year, thousands of people patronize their city, county, or state fair to enjoy rides, concerts, agricultural and art exhibits, and fair food. Fairs have become an annual tradition for families and bring thousands of people together every year.
     (2) The legislature finds that supporting Washington's fairs is important for the state and local economy. The legislature further finds that the current license that allows fairgoers to enjoy a variety of alcoholic beverages at the fair does not take into consideration the unique characteristics of a fair and was designed originally for sport entertainment facilities. It is the intent of the legislature to support Washington's fairs by creating a liquor license that is specifically designed for fairs, meeting the needs of the fair while providing safeguards for the public.

NEW SECTION.  Sec. 2   A new section is added to chapter 66.24 RCW to read as follows:
     (1) A license is created to be designated as a fair license, which is a special license to be issued to any fair organization that sponsors a fair. A fair license permits the licensee to:
     (a) Sell beer, wine, and spirits at retail to be consumed on the premises throughout the fairgrounds. On-premise consumption is not limited to areas designated as temporary lounges, beer gardens, or club rooms where seating is provided;
     (b) Sell beer from domestic breweries and microbreweries, wine from domestic wineries, and spirits from craft distilleries, at retail in bottles, cans, and original containers for consumption off the premises. Beer may also be sold in containers brought to the premises by the purchaser and filled at the tap at the time of sale for consumption off the premises. Domestic breweries, microbreweries, domestic wineries, and craft distilleries must have an endorsement from the board to sell its products at retail for off-premises consumption at a fair;
     (c) Provide, free or for a charge, single-serving samples of beer and wine from domestic breweries, microbreweries, and domestic wineries, and spirits from craft distilleries, in sample sizes of two ounces or less to customers for the purpose of sales promotion. Sampling activities of licensees under this section are subject to RCW 66.28.305 and 66.28.040 and the cost of sampling under this section may not be borne, directly or indirectly, by any manufacturer, importer, or distributor of liquor.
     (2) For the purposes of this section:
     (a) "Fair" means a fair organization's multiday event that, at a minimum, includes:
     (i) Exhibitions highlighting the state's agricultural industry, including exhibitions of agricultural animals, agricultural products, and other agriculturally related resources;
     (ii) Live music entertainment;
     (iii) Rodeo entertainment;
     (iv) Amusement park rides; and
     (v) Vendors selling food, crafts, and other products.
     (b) "Fair organization" means an organization that holds at least one temporary fair each year that is open to the public, requires a fee, ticket, or other consideration or permission for entrance, and is held at a fixed location within an enclosed area of land. The enclosed area of land does not have to be exclusively used for fairs.
     (3) The cost of the license is two thousand five hundred dollars per annum.
     (4)(a) To receive a license, a fair organization must submit an operating plan for board approval.
     (b) Once approved, the plan remains in effect until the licensee requests a change or the board determines that a change is necessary due to demonstrated problems or conditions not previously considered or adequately addressed in the original plan.
     (c) The plan must be submitted in a format designated by the board.
     (d) The plan must contain, at a minimum, the following elements:
     (i) How the fair organization will prevent the sale and service of alcohol to persons under twenty-one years of age and those who appear to be intoxicated;
     (ii) The ratio of alcohol service staff and security staff to the number of patrons expected to attend the fair;
     (iii) Training provided to staff who serve, regulate, or supervise the service of alcohol;
     (iv) The fair organization's policy on the number of alcoholic beverages that will be served to an individual patron during one transaction; and
     (v) A list of events to be held on fairgrounds during the fair at which alcohol service is planned.
     (5) The board may impose reasonable requirements upon a licensee under this section, including reasonable restrictions on the amounts of sampling and location where sampling may occur. The board must consider factors such as eating facilities, amenities available on the fairgrounds, and circulation patterns of patrons on fairgrounds.
     (6)(a) A licensee and an affiliated business may enter into arrangements with a manufacturer, importer, or distributor for brand advertising at the fair or promotion of events held at the fair. The financial arrangements providing for the brand advertising or promotion of events shall not be used as an inducement to purchase the products of the manufacturer, importer, or distributor entering into the arrangement nor shall it result in the exclusion of brands or products of other companies.
     (b) The arrangements allowed under this subsection (6) are an exception to arrangements prohibited under RCW 66.28.305. The board shall monitor the impacts of these arrangements. The board may conduct audits of the licensee and the affiliated business to determine compliance with this subsection (6). Audits may include but are not limited to product selection at the fair; purchase patterns of the licensee; contracts with the liquor manufacturer, importer, or distributor; and the amount allocated or used for liquor advertising by the licensee, affiliated business, manufacturer, importer, or distributor under the arrangements.
     (7) Vendors of the licensee that sell beer, wine, or spirits for on-premise or off-premise consumption must be licensed by the board to sell beer, wine, or spirits for on-premise or off-premise consumption. If a vendor commits a violation of this title at the fair, the board must impose the penalties prescribed for the violation on the specific vendor committing the violation. If the board cannot determine the specific vendor responsible for the violation, the board may impose the penalties prescribed on the licensee.
     (8) Nothing in this section precludes a fair organization from applying for or being eligible to receive a sports entertainment facility license under RCW 66.24.570 or any other license under this title for which it is qualified.

Sec. 3   RCW 66.20.300 and 2013 c 237 s 2 and 2013 c 219 s 2 are each reenacted and amended to read as follows:
     The definitions in this section apply throughout RCW 66.20.310 through 66.20.350 unless the context clearly requires otherwise.
     (1) "Alcohol" has the same meaning as "liquor" in RCW 66.04.010.
     (2) "Alcohol server" means any person who as part of his or her employment participates in the sale or service of alcoholic beverages for on-premise consumption at a retail licensed premise as a regular requirement of his or her employment, and includes those persons eighteen years of age or older permitted by the liquor laws of this state to serve alcoholic beverages with meals.
     (3) "Board" means the Washington state liquor control board.
     (4) "Retail licensed premises" means any:
     (a) Premises licensed to sell alcohol by the glass or by the drink, or in original containers primarily for consumption on the premises as authorized by this section and RCW 66.20.310, 66.24.320, 66.24.330, 66.24.350, 66.24.400, 66.24.425, 66.24.450, 66.24.570, 66.24.610, 66.24.650, ((and)) 66.24.655, and section 2 of this act;
     (b) Distillery licensed pursuant to RCW 66.24.140 that is authorized to serve samples of its own production;
     (c) Facility established by a domestic winery for serving and selling wine pursuant to RCW 66.24.170(4); and
     (d) Grocery store licensed under RCW 66.24.360, but only with respect to employees whose duties include serving during tasting activities under RCW 66.24.363.
     (5) "Training entity" means any liquor licensee associations, independent contractors, private persons, and private or public schools, that have been certified by the board.

Sec. 4   RCW 66.20.310 and 2013 c 237 s 3 and 2013 c 219 s 3 are each reenacted and amended to read as follows:
     (1)(a) There is an alcohol server permit, known as a class 12 permit, for a manager or bartender selling or mixing alcohol, spirits, wines, or beer for consumption at an on-premises licensed facility.
     (b) There is an alcohol server permit, known as a class 13 permit, for a person who only serves alcohol, spirits, wines, or beer for consumption at an on-premises licensed facility.
     (c) As provided by rule by the board, a class 13 permit holder may be allowed to act as a bartender without holding a class 12 permit.
     (2)(a) Effective January 1, 1997, except as provided in (d) of this subsection, every alcohol server employed, under contract or otherwise, at a retail licensed premise must be issued a class 12 or class 13 permit.
     (b) Every class 12 and class 13 permit issued must be issued in the name of the applicant and no other person may use the permit of another permit holder. The holder must present the permit upon request to inspection by a representative of the board or a peace officer. The class 12 or class 13 permit is valid for employment at any retail licensed premises described in (a) of this subsection.
     (c) Except as provided in (d) of this subsection, no licensee holding a license as authorized by this section and RCW 66.20.300, 66.24.320, 66.24.330, 66.24.350, 66.24.400, 66.24.425, 66.24.450, 66.24.570, 66.24.600, 66.24.610, 66.24.650, ((and)) 66.24.655, and section 2 of this act may employ or accept the services of any person without the person first having a valid class 12 or class 13 permit.
     (d) Within sixty days of initial employment, every person whose duties include the compounding, sale, service, or handling of liquor must have a class 12 or class 13 permit.
     (e) No person may perform duties that include the sale or service of alcoholic beverages on a retail licensed premises without possessing a valid alcohol server permit.
     (3) A permit issued by a training entity under this section is valid for employment at any retail licensed premises described in subsection (2)(a) of this section for a period of five years unless suspended by the board.
     (4) The board may suspend or revoke an existing permit if any of the following occur:
     (a) The applicant or permittee has been convicted of violating any of the state or local intoxicating liquor laws of this state or has been convicted at any time of a felony; or
     (b) The permittee has performed or permitted any act that constitutes a violation of this title or of any rule of the board.
     (5) The suspension or revocation of a permit under this section does not relieve a licensee from responsibility for any act of the employee or agent while employed upon the retail licensed premises. The board may, as appropriate, revoke or suspend either the permit of the employee who committed the violation or the license of the licensee upon whose premises the violation occurred, or both the permit and the license.
     (6)(a) After January 1, 1997, it is a violation of this title for any retail licensee or agent of a retail licensee as described in subsection (2)(a) of this section to employ in the sale or service of alcoholic beverages, any person who does not have a valid alcohol server permit or whose permit has been revoked, suspended, or denied.
     (b) It is a violation of this title for a person whose alcohol server permit has been denied, suspended, or revoked to accept employment in the sale or service of alcoholic beverages.
     (7) Grocery stores licensed under RCW 66.24.360, the primary commercial activity of which is the sale of grocery products and for which the sale and service of beer and wine for on-premises consumption with food is incidental to the primary business, and employees of such establishments, are exempt from RCW 66.20.300 through 66.20.350, except for employees whose duties include serving during tasting activities under RCW 66.24.363.

Sec. 5   RCW 66.24.170 and 2013 c 238 s 2 are each amended to read as follows:
     (1) There shall be a license for domestic wineries; fee to be computed only on the liters manufactured: Less than two hundred fifty thousand liters per year, one hundred dollars per year; and two hundred fifty thousand liters or more per year, four hundred dollars per year.
     (2) The license allows for the manufacture of wine in Washington state from grapes or other agricultural products.
     (3) Any domestic winery licensed under this section may also act as a retailer of wine of its own production. Any domestic winery licensed under this section may act as a distributor of its own production. Notwithstanding any language in this title to the contrary, a domestic winery may use a common carrier to deliver up to one hundred cases of its own production, in the aggregate, per month to licensed Washington retailers. A domestic winery may not arrange for any such common carrier shipments to licensed retailers of wine not of its own production. Except as provided in this section, any winery operating as a distributor and/or retailer under this subsection shall comply with the applicable laws and rules relating to distributors and/or retailers, except that a winery operating as a distributor may maintain a warehouse off the premises of the winery for the distribution of wine of its own production provided that: (a) The warehouse has been approved by the board under RCW 66.24.010; and (b) the number of warehouses off the premises of the winery does not exceed one.
     (4) A domestic winery licensed under this section, at locations separate from any of its production or manufacturing sites, may serve samples of its own products, with or without charge, and sell wine of its own production at retail, provided that: (a) Each additional location has been approved by the board under RCW 66.24.010; (b) the total number of additional locations does not exceed two; (c) a winery may not act as a distributor at any such additional location; and (d) any person selling or serving wine at an additional location for on-premise consumption must obtain a class 12 or class 13 alcohol server permit. Each additional location is deemed to be part of the winery license for the purpose of this title. At additional locations operated by multiple wineries under this section, if the board cannot connect a violation of RCW 66.44.200 or 66.44.270 to a single licensee, the board may hold all licensees operating the additional location jointly liable. Nothing in this subsection shall be construed to prevent a domestic winery from holding multiple domestic winery licenses.
     (5)(a) A domestic winery licensed under this section may apply to the board for an endorsement to sell wine of its own production at retail for off-premises consumption at a qualifying farmers market or fair. The annual fee for this endorsement is seventy-five dollars. An endorsement issued pursuant to this subsection does not count toward the two additional retail locations limit specified in this section.
     (b) For each month during which a domestic winery will sell wine at a qualifying farmers market or fair, the winery must provide the board or its designee a list of the dates, times, and locations at which bottled wine may be offered for sale. This list must be received by the board before the winery may offer wine for sale at a qualifying farmers market or fair.
     (c) The wine sold at qualifying farmers markets or fairs must be made entirely from grapes grown in a recognized Washington appellation or from other agricultural products grown in this state.
     (d) Each approved location in a qualifying farmers market or fair is deemed to be part of the winery license for the purpose of this title. The approved locations under an endorsement granted under this subsection include tasting or sampling privileges subject to the conditions pursuant to RCW 66.24.175. The winery may not store wine at a farmers market or fair beyond the hours that the winery offers bottled wine for sale. The winery may not act as a distributor from a farmers market or fair location.
     (e) Before a winery may sell bottled wine at a qualifying farmers market or fair, the farmers market or fair organization must apply to the board for authorization for any winery with an endorsement approved under this subsection to sell bottled wine at retail at the farmers market or fair. This application shall include, at a minimum: (i) A map of the farmers market or fair showing all booths, stalls, or other designated locations at which an approved winery may sell bottled wine; and (ii) the name and contact information for the on-site market managers or fair organization managers who may be contacted by the board or its designee to verify the locations at which bottled wine may be sold. Before authorizing a qualifying farmers market or fair to allow an approved winery to sell bottled wine at retail at its farmers market or fair location, the board shall notify the persons or entities of such application for authorization pursuant to RCW 66.24.010 (8) and (9). An authorization granted under this subsection (5)(e) may be withdrawn by the board for any violation of this title or any rules adopted under this title.
     (f) The board may adopt rules establishing the application and approval process under this section and such additional rules as may be necessary to implement this section.
     (g) For the purposes of this subsection:
     (i) "Qualifying farmers market" means an entity that sponsors a regular assembly of vendors at a defined location for the purpose of promoting the sale of agricultural products grown or produced in this state directly to the consumer under conditions that meet the following minimum requirements:
     (A) There are at least five participating vendors who are farmers selling their own agricultural products;
     (B) The total combined gross annual sales of vendors who are farmers exceeds the total combined gross annual sales of vendors who are processors or resellers;
     (C) The total combined gross annual sales of vendors who are farmers, processors, or resellers exceeds the total combined gross annual sales of vendors who are not farmers, processors, or resellers;
     (D) The sale of imported items and secondhand items by any vendor is prohibited; and
     (E) No vendor is a franchisee.
     (ii) "Farmer" means a natural person who sells, with or without processing, agricultural products that he or she raises on land he or she owns or leases in this state or in another state's county that borders this state.
     (iii) "Processor" means a natural person who sells processed food that he or she has personally prepared on land he or she owns or leases in this state or in another state's county that borders this state.
     (iv) "Reseller" means a natural person who buys agricultural products from a farmer and resells the products directly to the consumer.
     (v) "Fair" and "fair organization" have the same meaning as used in section 2 of this act.
     (6) Wine produced in Washington state by a domestic winery licensee may be shipped out-of-state for the purpose of making it into sparkling wine and then returned to such licensee for resale. Such wine shall be deemed wine manufactured in the state of Washington for the purposes of RCW 66.24.206, and shall not require a special license.

Sec. 6   RCW 66.24.240 and 2011 c 195 s 6 and 2011 c 119 s 212 are each reenacted and amended to read as follows:
     (1) There shall be a license for domestic breweries; fee to be two thousand dollars for production of sixty thousand barrels or more of malt liquor per year.
     (2) Any domestic brewery, except for a brand owner of malt beverages under RCW 66.04.010(7), licensed under this section may also act as a distributor and/or retailer for beer of its own production. Any domestic brewery operating as a distributor and/or retailer under this subsection shall comply with the applicable laws and rules relating to distributors and/or retailers. A domestic brewery holding a spirits, beer, and wine restaurant license may sell beer of its own production for off-premises consumption from its restaurant premises in kegs or in a sanitary container brought to the premises by the purchaser or furnished by the licensee and filled at the tap by the licensee at the time of sale.
     (3) Any domestic brewery licensed under this section may also sell beer produced by another domestic brewery or a microbrewery for on and off-premises consumption from its premises as long as the other breweries' brands do not exceed twenty-five percent of the domestic brewery's on-tap offering of its own brands.
     (4) A domestic brewery may hold up to two retail licenses to operate an on or off-premise tavern, beer and/or wine restaurant, or spirits, beer, and wine restaurant. This retail license is separate from the brewery license. A brewery that holds a tavern license, a spirits, beer, and wine restaurant license, or a beer and/or wine restaurant license shall hold the same privileges and endorsements as permitted under RCW 66.24.320, 66.24.330, and 66.24.420.
     (5) Any domestic brewery licensed under this section may contract-produce beer for a brand owner of malt beverages defined under RCW 66.04.010(7), and this contract-production is not a sale for the purposes of RCW 66.28.170 and 66.28.180.
     (6)(a) A domestic brewery licensed under this section and qualified for a reduced rate of taxation pursuant to RCW 66.24.290(3)(b) may apply to the board for an endorsement to sell bottled beer of its own production at retail for off-premises consumption at a qualifying farmers market or fair. The annual fee for this endorsement is seventy-five dollars.
     (b) For each month during which a domestic brewery will sell beer at a qualifying farmers market or fair, the domestic brewery must provide the board or its designee a list of the dates, times, and locations at which bottled beer may be offered for sale. This list must be received by the board before the domestic brewery may offer beer for sale at a qualifying farmers market or fair.
     (c) The beer sold at qualifying farmers markets or fairs must be produced in Washington.
     (d) Each approved location in a qualifying farmers market or fair is deemed to be part of the domestic brewery license for the purpose of this title. The approved locations under an endorsement granted under this subsection do not include the tasting or sampling privilege of a domestic brewery. The domestic brewery may not store beer at a farmers market or fair beyond the hours that the domestic brewery offers bottled beer for sale. The domestic brewery may not act as a distributor from a farmers market or fair location.
     (e) Before a domestic brewery may sell bottled beer at a qualifying farmers market or fair, the farmers market or fair organization must apply to the board for authorization for any domestic brewery with an endorsement approved under this subsection to sell bottled beer at retail at the farmers market or fair. This application shall include, at a minimum: (i) A map of the farmers market or fair showing all booths, stalls, or other designated locations at which an approved domestic brewery may sell bottled beer; and (ii) the name and contact information for the on-site market managers or fair organization managers who may be contacted by the board or its designee to verify the locations at which bottled beer may be sold. Before authorizing a qualifying farmers market or fair organization to allow an approved domestic brewery to sell bottled beer at retail at its farmers market or fair location, the board shall notify the persons or entities of such application for authorization pursuant to RCW 66.24.010 (8) and (9). An authorization granted under this subsection (6)(e) may be withdrawn by the board for any violation of this title or any rules adopted under this title.
     (f) The board may adopt rules establishing the application and approval process under this section and such additional rules as may be necessary to implement this section.
     (g) For the purposes of this subsection:
     (i) "Qualifying farmers market" means an entity that sponsors a regular assembly of vendors at a defined location for the purpose of promoting the sale of agricultural products grown or produced in this state directly to the consumer under conditions that meet the following minimum requirements:
     (A) There are at least five participating vendors who are farmers selling their own agricultural products;
     (B) The total combined gross annual sales of vendors who are farmers exceeds the total combined gross annual sales of vendors who are processors or resellers;
     (C) The total combined gross annual sales of vendors who are farmers, processors, or resellers exceeds the total combined gross annual sales of vendors who are not farmers, processors, or resellers;
     (D) The sale of imported items and secondhand items by any vendor is prohibited; and
     (E) No vendor is a franchisee.
     (ii) "Farmer" means a natural person who sells, with or without processing, agricultural products that he or she raises on land he or she owns or leases in this state or in another state's county that borders this state.
     (iii) "Processor" means a natural person who sells processed food that he or she has personally prepared on land he or she owns or leases in this state or in another state's county that borders this state.
     (iv) "Reseller" means a natural person who buys agricultural products from a farmer and resells the products directly to the consumer.
     (v) "Fair" and "fair organization" have the same meaning as used in section 2 of this act.

Sec. 7   RCW 66.24.244 and 2013 c 238 s 3 are each amended to read as follows:
     (1) There shall be a license for microbreweries; fee to be one hundred dollars for production of less than sixty thousand barrels of malt liquor, including strong beer, per year.
     (2) Any microbrewery licensed under this section may also act as a distributor and/or retailer for beer and strong beer of its own production. Strong beer may not be sold at a farmers market or fair or under any endorsement which may authorize microbreweries to sell beer at farmers markets or fairs. Any microbrewery operating as a distributor and/or retailer under this subsection shall comply with the applicable laws and rules relating to distributors and/or retailers, except that a microbrewery operating as a distributor may maintain a warehouse off the premises of the microbrewery for the distribution of beer provided that (a) the warehouse has been approved by the board under RCW 66.24.010 and (b) the number of warehouses off the premises of the microbrewery does not exceed one. A microbrewery holding a spirits, beer, and wine restaurant license may sell beer of its own production for off-premises consumption from its restaurant premises in kegs or in a sanitary container brought to the premises by the purchaser or furnished by the licensee and filled at the tap by the licensee at the time of sale.
     (3) Any microbrewery licensed under this section may also sell beer produced by another microbrewery or a domestic brewery for on and off-premises consumption from its premises as long as the other breweries' brands do not exceed twenty-five percent of the microbrewery's on-tap offering of its own brands.
     (4) The board may issue up to two retail licenses allowing a microbrewery to operate an on or off-premise tavern, beer and/or wine restaurant, or spirits, beer, and wine restaurant.
     (5) A microbrewery that holds a tavern license, spirits, beer, and wine restaurant license, or a beer and/or wine restaurant license shall hold the same privileges and endorsements as permitted under RCW 66.24.320, 66.24.330, and 66.24.420.
     (6)(a) A microbrewery licensed under this section may apply to the board for an endorsement to sell bottled beer of its own production at retail for off-premises consumption at a qualifying farmers market or fair. The annual fee for this endorsement is seventy-five dollars.
     (b) For each month during which a microbrewery will sell beer at a qualifying farmers market or fair, the microbrewery must provide the board or its designee a list of the dates, times, and locations at which bottled beer may be offered for sale. This list must be received by the board before the microbrewery may offer beer for sale at a qualifying farmers market or fair.
     (c) Any person selling or serving beer must obtain a class 12 or class 13 alcohol server permit.
     (d) The beer sold at qualifying farmers markets or fairs must be produced in Washington.
     (e) Each approved location in a qualifying farmers market or fair is deemed to be part of the microbrewery license for the purpose of this title. The approved locations under an endorsement granted under this subsection (6) include tasting or sampling privileges subject to the conditions pursuant to RCW 66.24.175. The microbrewery may not store beer at a farmers market or fair beyond the hours that the microbrewery offers bottled beer for sale. The microbrewery may not act as a distributor from a farmers market or fair location.
     (f) Before a microbrewery may sell bottled beer at a qualifying farmers market or fair, the farmers market or fair organization must apply to the board for authorization for any microbrewery with an endorsement approved under this subsection (6) to sell bottled beer at retail at the farmers market or fair. This application shall include, at a minimum: (i) A map of the farmers market or fair showing all booths, stalls, or other designated locations at which an approved microbrewery may sell bottled beer; and (ii) the name and contact information for the on-site market managers or fair organization managers who may be contacted by the board or its designee to verify the locations at which bottled beer may be sold. Before authorizing a qualifying farmers market or fair organization to allow an approved microbrewery to sell bottled beer at retail at its farmers market or fair location, the board shall notify the persons or entities of the application for authorization pursuant to RCW 66.24.010 (8) and (9). An authorization granted under this subsection (6)(f) may be withdrawn by the board for any violation of this title or any rules adopted under this title.
     (g) The board may adopt rules establishing the application and approval process under this section and any additional rules necessary to implement this section.
     (h) For the purposes of this subsection (6):
     (i) "Qualifying farmers market" means an entity that sponsors a regular assembly of vendors at a defined location for the purpose of promoting the sale of agricultural products grown or produced in this state directly to the consumer under conditions that meet the following minimum requirements:
     (A) There are at least five participating vendors who are farmers selling their own agricultural products;
     (B) The total combined gross annual sales of vendors who are farmers exceeds the total combined gross annual sales of vendors who are processors or resellers;
     (C) The total combined gross annual sales of vendors who are farmers, processors, or resellers exceeds the total combined gross annual sales of vendors who are not farmers, processors, or resellers;
     (D) The sale of imported items and secondhand items by any vendor is prohibited; and
     (E) No vendor is a franchisee.
     (ii) "Farmer" means a natural person who sells, with or without processing, agricultural products that he or she raises on land he or she owns or leases in this state or in another state's county that borders this state.
     (iii) "Processor" means a natural person who sells processed food that he or she has personally prepared on land he or she owns or leases in this state or in another state's county that borders this state.
     (iv) "Reseller" means a natural person who buys agricultural products from a farmer and resells the products directly to the consumer.
     (v) "Fair" and "fair organization" have the same meaning as used in section 2 of this act.
     (7) Any microbrewery licensed under this section may contract-produce beer for another microbrewer. This contract-production is not a sale for the purposes of RCW 66.28.170 and 66.28.180.

Sec. 8   RCW 66.24.145 and 2013 c 98 s 1 are each amended to read as follows:
     (1) Any craft distillery may sell spirits of its own production for consumption off the premises, up to three liters per person per day. A craft distillery selling spirits under this subsection must comply with the applicable laws and rules relating to retailers.
     (2) Any craft distillery may contract distilled spirits for, and sell contract distilled spirits to, holders of distillers' or manufacturers' licenses, including licenses issued under RCW 66.24.520, or for export.
     (3) Any craft distillery licensed under this section may provide, free of charge, one-half ounce or less samples of spirits of its own production to persons on the premises of the distillery. The maximum total per person per day is two ounces. Every person who participates in any manner in the service of samples must obtain a class 12 alcohol server permit.
     (4) The board must adopt rules to implement the alcohol server permit requirement and may adopt additional rules to implement this section.
     (5) Distilling is an agricultural practice.
     (6)(a) A craft distillery licensed under this section may apply to the board for an endorsement to sell bottled spirits of its own production at retail for off-premises consumption at a fair. The annual fee for this endorsement is seventy-five dollars.
     (b) For each month during which a craft distillery will sell bottled spirits at a fair, the craft distillery must provide the board or its designee a list of the dates, times, and locations at which bottled spirits may be offered for sale. This list must be received by the board before the distillery may offer bottled spirits for sale at a fair.
     (c) The bottled spirits sold at a fair must be produced in Washington.
     (d) Before a craft distillery may sell spirits at a fair, the fair organization must apply to the board for authorization for any craft distillery with an endorsement approved under this subsection to sell bottled spirits at retail at the fair. This application shall include, at a minimum: (i) A map of the fair showing all booths, stalls, or other designated locations at which an approved craft distillery may sell bottled spirits; and (ii) the name and contact information for the on-site fair organization managers who may be contacted by the board or its designee to verify the locations at which bottled beer may be sold. Before authorizing a fair organization to allow an approved craft distillery to sell bottled spirits at retail at its fair location, the board shall notify the persons or entities of such application for authorization pursuant to RCW 66.24.010 (8) and (9). An authorization granted under this subsection may be withdrawn by the board for any violation of this title or any rules adopted under this title.
     (e) The board may adopt rules establishing the application and approval process under this section and such additional rules as may be necessary to implement this section.
     (f) For the purposes of this subsection, "fair" and "fair organization" have the same meaning as used in section 2 of this act.